More on Food and the World

Frank’s post, Food Shortages and Aid Wastages, hits on a point that must be addressed so thanks Frank for bringing it up. Still what is odd about the Economist coverage is that it asks “Global food shortages have taken everyone by surprise. What is to be done?” There is no surprise here. The Economist ran a cover in early December 2007 called “The end of cheap food.” That story noted:

But the rise in prices is also the self-inflicted result of America’s reckless ethanol subsidies. This year biofuels will take a third of America’s (record) maize harvest. That affects food markets directly: fill up an SUV’s fuel tank with ethanol and you have used enough maize to feed a person for a year. And it affects them indirectly, as farmers switch to maize from other crops. The 30m tonnes of extra maize going to ethanol this year amounts to half the fall in the world’s overall grain stocks.

But the food scare of 2008, severe as it is, is only a symptom of a broader problem. The surge in food prices has ended 30 years in which food was cheap, farming was subsidised in rich countries and international food markets were wildly distorted.

Just to bring home how this works, as Frank quoted “For the middle classes it means cutting out medical care. For those on $2 a day, it means cutting out meat and taking the children out of school. For those on $1 a day, it means cutting out meat and vegetables and eating only cereals. And for those on 50 cents a day, it means total disaster.”

Here is a little more to explain how many people are affected by these changes:

On a conservative estimate, food-price rises may reduce the spending power of the urban poor and country people who buy their own food by 20% (in some regions, prices are rising by far more). Just over 1 billion people live on $1 a day, the benchmark of absolute poverty; 1.5 billion live on $1 to $2 a day. Bob Zoellick, the president of the World Bank, reckons that food inflation could push at least 100m people into poverty, wiping out all the gains the poorest billion have made during almost a decade of economic growth. (emphasis added)

This is not a “new” problem. No one should be surprised. That the Economist is calling for the world to pay attention to food and its impact on world politics is excellent. That its recent article suggests this issue is a surprise and change will be slow because the reality of supply and demand for food means a long response time (it takes time to grow crops), is perhaps disingenuous. Disingenuous, not entirely for the Economist; rather, the magazine and many others have known about these issues for some time. Policy folks who say switch to alternative fuels and feel good about not relying on oil know of these problems. Policy that ignores the numerous impacts on billions sows seeds of political unrest, revolution, and war. To ignore the immense power of what we can do to mitigate these possible results is arguably immoral. It also fails to live up to the United States’s proven ability to be a leader in innovation while wasting a chance to rebuild its place on the world scene. Even if one disagrees and wishes to focus on self-interest, ignoring the problems increases the chance that more dire consequences will reach out and touch our day-to-day lives.